When you have an escrow account, also called impound account. This type of account is set up by your mortgage lender at the time acquires new loan. In additional of your monthly mortgage payment, you will deposit monies into your impounds account. Your mortgage lender will keep those monies in the account until property taxes (or fire insurance…etc) is due. They (your mortgage lender) will pay it off for you. This way, you will never be late or get charge for expensive penalty of 10%.